[Asia Economy Reporter Byunghee Park] "The 2020 Great Lockdown could turn into the 2021 Great Divergency."
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), made this remark on the 22nd (local time) during her appearance at the European Union (EU) Parliament, referring to the widening wealth gap between countries caused by COVID-19.
Georgieva stated that although the global economy remains in a precarious situation due to COVID-19, the most concerning issue is the growing gap between rich and poor countries. She emphasized that even before the world economy fully recovers from the crisis caused by COVID-19, the disparity between wealthy and poor nations could widen.
The IMF expects that the per capita national income of emerging countries in Central and Eastern Europe will decrease by nearly 4% by the end of next year compared to pre-COVID-19 levels. In contrast, the decline in per capita national income in Western European advanced countries is expected to be about 1.3%, predicting a widening gap between developed and developing countries.
Georgieva explained that developing countries suffer more severe economic damage from COVID-19 because they have fewer jobs that allow remote work.
She noted that due to COVID-19, the economies of 90% of countries worldwide contracted last year, marking the worst downturn since the end of the Cold War. While COVID-19 vaccines help stabilize the economy, it remains uncertain whether the global economy has entered a path to recovery, as virus spread continues alongside vaccine distribution.
Georgieva also stressed the need to strive for a more environmentally friendly economy. The IMF predicts that investment in green energy infrastructure will create millions of new jobs and boost the global economy by about 1% annually over the next 15 years.
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